Critics alarmed by digital billboard plan that would pay city of L.A.

Pushed by the major sign companies, Los Angeles officials are considering crafting special laws to protect digital billboards, rules that could allow the cash-strapped city to share revenues from the blinking displays.

Amid concerns from neighborhood groups and smaller billboard companies about a backroom deal, the City Council will vote Tuesday on forming a working group to create new digital sign laws.

The group would include representatives from the billboard companies.

In the short term, new laws for digital billboards could benefit the roughly 100 digital displays owned by Clear Channel and CBS Outdoor.

A key court ruling on the legality of those billboards is expected later this year or early next year, and new laws crafted by the city could protect the 100 boards and possibly allow for more displays.

In their motion last week, City Council members Paul Krekorian and Ed Reyes argued the city could benefit from a revenue-sharing deal.

"The city needs a real and enforceable solution that eliminates a significant portion of the city's billboards," Krekorian said in a written statement.

Whether the city could seek a reduction in the number of digital billboards or static displays is unclear.

According to Krekorian spokesman Jeremy Oberstein, the motion was written with input from representatives from the billboard companies.

With neighborhood leaders planning to testify at Tuesday's meeting, the vote is likely to revive the debate over digital signs and the City Council's uneven record in trying to legislate them.

Locals from Silver Lake to Venice have complained about the glare and distraction of the displays, and sought to remove the boards from their neighborhoods.

But in a twist, this latest proposal is also drawing anger from other sign companies, who argue the major billboard companies are dangling revenue in exchange for the city's protection of digital billboards.

"Clearly, this motion is instigated by CBS and Clear Channel," said Philip Recht, attorney for Summit Media, a competitor in the sign industry. "It's intended to do an end run around the court ruling and to preserve the spoils of the illegal agreement."

That agreement dates back to 2006, when the City Council allowed Channel Outdoor and CBS Outdoor, two major billboard companies, to digitize up to hundreds of billboards in exchange for removing a tiny fraction of their inventory.

Summit Media successfully sued the city over that settlement, arguing L.A. officials circumvented the normal zoning process by allowing Clear Channel and CBS, but not other companies, to put up digital signs.

A judge agreed, and by that time, the two companies had put up a total of about 100 digital signs.

The appeal case is expected to start later this month. A judge could invalidate the 2006 agreement, essentially leaving L.A. in limbo, and requiring the city to re-approve the permits for the digital signs, or force Clear Channel and CBS to remove the signs.

For many, the council's latest motion is deja vu, startlingly similar to the 2006 deal.

"This is trying to run around the courts again," said Steve Sann, chairman of the Westwood Community Council. "Rather than have the courts make a ruling, the council is basically planning to get in bed with the billboard industry."

Tuesday's vote follows months of lobbying from Clear Channel, which pushed for City Council President Herb Wesson and other council members to create new rules for the digital signs amid the looming court decision.

On average, a digital billboard makes about $100,000-$300,000 a month, according to industry experts, or about four times what a regular billboard pulls in.

While numerous cities have banned digital billboards, a handful are exploring revenue deals.

This summer, St. Petersburg, Fla., voted to replace 83 static billboards with six digital billboards throughout the city, and receive 15 percent of the revenue generated by the boards. And in Baltimore, officials recently explored a billboard tax.

Clear Channel vice president Jim Cullinan said the Krekorian-Reyes proposal "could be a positive step" toward a legislative solution.

"This motion comes from the City Council and really represents the opportunity for the city to take control of its own destiny, rather than relying on a court to determine the city's outdoor advertising policy," he said.